Raleigh Suburbs: general area/investing questions

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Raleigh Suburbs: general area/investing questions

Joseph Shevy
Glens Falls, NY · Member since 2015 · 57 posts · 14 votes

Hey Everyone! My name is Joe - I currently live in upstate NY and may have the option of moving to the Raleigh area for work. Im excited for this possibility, as this area offers MANY more opportunities than the area I currently live.

So - there is only so much you can learn from Google. Ive researched different suburbs that i might like, but I'd love to hear from investors, agents, brokers, etc., on which areas are nicest to raise a family? Which areas are best for cash/cash returns, appreciation, etc.? Which are growing fastest? Are HOA's typical and how much are they usually? What type of investing do you do in the area, and why?

My goal, if everything worked out how I'd want it to (it never does), i would find an area I like and house hack a single family house, that i could update and rent out eventually. I currently own 8 doors in NY, and would probably liquidate my lower cash flow properties and move that money into NC real estate.

Please reply or message me if you have anything you can share! Even if its just to tell me which areas you prefer.

Also, I am looking to make a trip down in July, and would love to connect with investors/agents in the area and possibly look at a few houses.

Thank you,

Joe

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Jerry AgbonPro Member
Raleigh, NC · Member since 2015 · 60 posts · 19 votes
6y

Hello Joseph! I was in a similar situation a year ago, my wife and I were moving to NC from MA, we have to decide between Raleigh and Charlotte, visited NC for 2 weeks, drove around to both Raleigh and Charlotte, then decided Raleigh was the better city for us.

Sold our primary residential single family house in Quincy MA, of 3 bedrooms and 2 bathrooms for 599K with a profit of 250K. Then, bought a 2 bedrooms 2 bathrooms condo in Raleigh for 85K, paid cash, and then moved in last year May. Our monthly expense dropped by about 80% by making this move, that means we can now save more.

We also have a rental triplex in Dorchester MA. once the move to Raleigh was completed, the next objective was to start looking for investment properties to replace our triplex in MA. We then put the triplex on the market using a 1031exchange, to avoid cap gain tax. We were expecting to replace our MA triplex with another triplex or quad in Raleigh, but we quickly realized that houses here are a lot cheaper compared to those in Boston, and for 1031exchange we needed something of equal or more in price range comparison. So, the only choice left to use was to go MFH, from 12 units and above. We decided not to make purchase in Raleigh main town because of low cashflow, set a parameter of 2 hours drive from Raleigh, found a 36 MFH deal, clench the deal, sold the triplex in Boston and make the payment using 1031 exchange from the triplex, quadrupled  our cash flow, now am back on the market looking for more MFH to buy.

In the process of our research, we decided to stay out of the red hot market zones like Raleigh and Charlotte, rather to focus on those up and coming towns that are in between these 2 competing cities. That seems to've paid off handsomely so far, even with the covid crisis we've just had.

I hope this would be of some help and encouragement to you. I wish you the very best in your endeavors!    

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  • Jiri B.
    Rental Property Investor · Raleigh, NC · Member since 2017 · 157 posts · 169 votes
    6y

    @Joseph Shevy i will try to answer your question in a bit different way then what you can expect, but will pretty much apply for any market / location..

    - the higher the price, the nicer the location (so depends on your budget, you will see where you can lend or how much you want to spend)

    - as for investment property, you can just simply look at sites like Zillow and look at property value vs estimated rent. The better the ratio, the better the cashflow. Simple math. Then again, the higher the purchase price / rent, the nicer the location but the lower the cashflow or even negative cashflow at that point.

    Typically, you will get better returns with lower priced properties. Eg, 3beds, 2bath for 220k that rents for $1500/mo then purchasing a nicer home for 350k, that only rents for $2,000/mo. Typical ratio right now is about 0.7

    Multiunit properties are not very common here in the south (quad duplex etc) although you can find duplexes more often.

    What works best for me are SFH homes in the 200k-300k range that rents around 1,400-1,800/mo or townhomes around 150k mark that rents for around 1,200/mo (but can have high HOA).

    1Reply
  • Chris Carrigan
    Real Estate Agent · Wake Forest, NC · Member since 2015 · 66 posts · 54 votes
    6y

    Hi Joseph,

    Raleigh’s market is very strong with more demand then inventory.  It will be difficult to get a house hack in Raleigh due to demand.  Look at some of the outer suburbs for more potential.   On the south side the Clayton area is booming.  To the north the Franklington and Youngsville area are a little further behind but will be growing quickly.  If you want to stay in Wake County the deals are better further out.  If you’re set on Raleigh, the southeast side is seeing a lot of of gentrification, so if you’re willing to do a substantial remodel there are some opportunities there - but there is a lot of competition for these properties. I’d be glad to set you up a search if you can send me the parameters you’re looking for. 

    Thanks

    Chris Carrigan

    EXP Realty 

    1Reply
  • Igor S.Pro Member
    Rental Property Investor · Charlotte, NC · Member since 2013 · 110 posts · 35 votes
    6y

    @Joseph Shevy Feel free to contact me directly!  I'm down in the southern wake county area but have some rentals all over the place, even outside of the Raleigh area.  I was in the same situation as you a few years back so I can share my experience!

    www.shiper-realty.com

    0Reply
  • Alfred Uda
    New to Real Estate · Raleigh, NC · Member since 2020 · 32 posts · 13 votes
    6y

    Thank you all for the input, i am also in similar situation as @Joseph Shevy. The different is that i moved in the area already earlier this year. Now i am actively looking for properties and to make connection in the area. 

    0Reply
  • Will Kaufmann
    Flipper/Rehabber · Raleigh, NC · Member since 2018 · 76 posts · 67 votes
    6y
    Originally posted by @Jiri B.:

    @Joseph Shevy i will try to answer your question in a bit different way then what you can expect, but will pretty much apply for any market / location..

    - the higher the price, the nicer the location (so depends on your budget, you will see where you can lend or how much you want to spend)

    - as for investment property, you can just simply look at sites like Zillow and look at property value vs estimated rent. The better the ratio, the better the cashflow. Simple math. Then again, the higher the purchase price / rent, the nicer the location but the lower the cashflow or even negative cashflow at that point.

    Typically, you will get better returns with lower priced properties. Eg, 3beds, 2bath for 220k that rents for $1500/mo then purchasing a nicer home for 350k, that only rents for $2,000/mo. Typical ratio right now is about 0.7

    Multiunit properties are not very common here in the south (quad duplex etc) although you can find duplexes more often.

    What works best for me are SFH homes in the 200k-300k range that rents around 1,400-1,800/mo or townhomes around 150k mark that rents for around 1,200/mo (but can have high HOA).

    I echo what Jiri said, and this will point you towards properties generally outside of 440/40. 

    One word of caution, based on my recent anecdotal review of Zillow property value estimates, they seem to be 10-20% off of actual market values. I think Zillow uses a pure play $/sqft value, based on data which may include refinances, and does not accurately adjust for comparable sales.

    As for appreciation, we have a strong market down here but per usual it's hard to predict where prices will actually be in one, three, five years etc. On the plus side, there is less room for price contraction than in many other leading national markets.

    0Reply
  • Payton Chung
    Developer · DC & NC · Member since 2019 · 113 posts · 95 votes
    6y

    Two things to note: most houses have HOAs, and the city vs. suburb distinction is nowhere near as clear as it is in NY for various and sundry reasons. 90% of the "city" by area looks "suburban," so don't assume that suburban towns are necessarily nicer than the bigger cities.

    1Reply
  • Jerry AgbonPro Member
    Raleigh, NC · Member since 2015 · 60 posts · 19 votes
    6y

    Hello Joseph! I was in a similar situation a year ago, my wife and I were moving to NC from MA, we have to decide between Raleigh and Charlotte, visited NC for 2 weeks, drove around to both Raleigh and Charlotte, then decided Raleigh was the better city for us.

    Sold our primary residential single family house in Quincy MA, of 3 bedrooms and 2 bathrooms for 599K with a profit of 250K. Then, bought a 2 bedrooms 2 bathrooms condo in Raleigh for 85K, paid cash, and then moved in last year May. Our monthly expense dropped by about 80% by making this move, that means we can now save more.

    We also have a rental triplex in Dorchester MA. once the move to Raleigh was completed, the next objective was to start looking for investment properties to replace our triplex in MA. We then put the triplex on the market using a 1031exchange, to avoid cap gain tax. We were expecting to replace our MA triplex with another triplex or quad in Raleigh, but we quickly realized that houses here are a lot cheaper compared to those in Boston, and for 1031exchange we needed something of equal or more in price range comparison. So, the only choice left to use was to go MFH, from 12 units and above. We decided not to make purchase in Raleigh main town because of low cashflow, set a parameter of 2 hours drive from Raleigh, found a 36 MFH deal, clench the deal, sold the triplex in Boston and make the payment using 1031 exchange from the triplex, quadrupled  our cash flow, now am back on the market looking for more MFH to buy.

    In the process of our research, we decided to stay out of the red hot market zones like Raleigh and Charlotte, rather to focus on those up and coming towns that are in between these 2 competing cities. That seems to've paid off handsomely so far, even with the covid crisis we've just had.

    I hope this would be of some help and encouragement to you. I wish you the very best in your endeavors!    

    3Reply
  • Matthew Rupert
    Durham, NC · Member since 2019 · 8 posts · 7 votes
    6y

    Lots of good input here for you.  As Raleigh expands all of the surrounding cities will see more growth as well and present good opportunities. Rolesville is one of the fastest growing small cities in the state.  Fuquay Varina, Clayton, Garner, Franklinton and Youngsville are other great options.  

    0Reply
  • Account Closed
    Raleigh, NC · Member since 2020 · 7 posts · 7 votes
    6y

    Feel free to message me as well! I have lived in the Raleigh area for over 11 and luckily no matter where you buy there will be appreciation because there is so much demand to move to the “Triangle”. Some neighborhoods are appreciating much faster than others, especially if you are near a greenway. 

    0Reply
  • Account Closed
    Real Estate Agent · Member since 2020 · 28 posts · 12 votes
    6y

    @Joseph Shevy

    Hello Joseph, I have a direct line to potential property investment here in the Raleigh and surrounding areas! For more information please feel free to PM me.

    Thank you

    0Reply
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